IndiGrid Launches ₹1,500 Crore QIP to Fund Expansion

Introduction

IndiGrid Infrastructure Trust Ltd. announced on Tuesday, January 20, the launch of a Qualified Institutional Placement (QIP) to raise up to ₹1,500 crore. This strategic capital raise is aimed at financing its recent acquisition and supporting its ongoing expansion in India's power transmission sector. The move underscores the company's focus on strengthening its portfolio of revenue-generating infrastructure assets.

QIP Structure and Pricing

The institutional placement is structured to provide flexibility, with a base issue size of ₹1,200 crore and a greenshoe option to retain an additional ₹300 crore. The floor price for the issue has been fixed at ₹167.42 per unit, a notable premium over the previous day's closing price of ₹164.11. At the upper end of the offering, including the greenshoe option, the QIP will result in the issuance of approximately 9.2 crore new units. The base issue size corresponds to about 7.3 crore units. According to sources, the investment manager and trustee will be subject to a 90-day lock-up period post-allotment, while the sponsor will have a 60-day lock-up.

Strategic Acquisition of Gadag Transmission

The fundraising initiative follows IndiGrid's recent announcement to acquire Gadag Transmission Ltd. for an enterprise value of around ₹372 crore. This acquisition is a significant step in expanding its presence in the renewable energy evacuation space. Gadag Transmission is an inter-state transmission system project operating on a build-own-operate-maintain model. It is a critical piece of infrastructure, representing the first phase of the system designed to evacuate approximately 2,500 MW of solar power from the Gadag Solar Energy Zone in Karnataka. Prior to the acquisition, the asset was jointly owned by ReNew Transmission Ventures Private Ltd and KNI India AS.

Financial Impact and Funding Strategy

IndiGrid plans to finance the acquisition of Gadag Transmission through a balanced mix of equity, internal accruals, and debt. This diversified funding approach allows the company to manage its capital structure effectively. Following the completion of the transaction, IndiGrid's net debt to Assets Under Management (AUM) ratio is projected to stand at 60.5%. The management has indicated that this leverage level provides adequate headroom for pursuing future growth opportunities without overextending its balance sheet. This prudent financial management is crucial for maintaining investor confidence and ensuring long-term sustainability.

Broader Capital Expansion Plans

In addition to the current QIP, IndiGrid's investment manager has approved an enabling resolution to raise further capital of up to ₹1,000 crore. This is on top of a previously approved limit of ₹1,500 crore from October 2025, bringing the total potential capital raising limit to ₹2,500 crore. This larger fundraising authority, subject to unitholder and regulatory approvals, signals a robust pipeline of potential acquisitions and a long-term strategy for significant expansion. The company may explore various instruments, including rights issues or preferential issues, to secure this capital.

Financial Health Snapshot

A look at IndiGrid's financial position as of March 2025 reveals a solid foundation for its growth ambitions. The trust has demonstrated consistent growth across key financial metrics.

These figures highlight a healthy expansion in the company's asset base and equity, positioning it well to absorb new assets and manage associated debt.

Market Performance and Outlook

Shares of IndiGrid closed the previous session down by 0.9% at ₹164.11. However, this minor dip does not detract from the stock's strong performance over the past year, during which it has delivered a gain of 13.3%. This annual return reflects positive investor sentiment towards the InvIT's stable distribution model and its strategic acquisitions. The premium pricing of the QIP floor price further reinforces the management's confidence in the intrinsic value and future prospects of its units.

Conclusion

IndiGrid's ₹1,500 crore QIP is a calculated move to fuel its next phase of growth, starting with the integration of the Gadag Transmission project. By expanding its portfolio with critical renewable energy infrastructure, the trust is aligning itself with India's energy transition goals. With a clear capital raising strategy and a solid financial base, IndiGrid is well-positioned to continue expanding its asset portfolio and delivering stable returns to its unitholders. The successful completion of this placement will be a key indicator of institutional investor confidence in its long-term strategy.